Huffington Post Piece on Taxes Leaves Out Key Details, Economic Truth

I nearly choked reading the Huffington Post’s Nov. 21 article by Robert Creamer – described at the end of the article as “a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win.”

HuffPo neglected to also describe Creamer as husband to liberal Democrat Congresswoman Jan Schakowsky of Evanston (a suburb just north of Chicago) — and as a felon who five years ago pleaded guilty to writing more than $2.3 million of bad checks in a check-kiting scheme, and failing to pay payroll taxes owed by his political organization.

Creamer used a checkbook to try to scam more money from banks than John Dillinger stole using Tommy guns. Now Creamer calls for raising taxes but apparently has an aversion to paying taxes he owes.

As for Creamer’s argument that “tax cuts for the rich not only do nothing to spur economic growth — they actually do substantial damage to the prospects for economic growth,” it rests largely on citing high marginal tax rates on the “wealthy” decades ago and the experience of the Clinton and Bush administrations, when the Clinton administration had somewhat higher tax rates and better economic growth.

He apparently does not know or care that those high marginal tax rates decades ago came with far more tax deductions, exemptions and shelters than are allowed today. Virtually no wealthy persons paid those high tax rates.

He laughably cites the Second World War as an engine of economic growth, when in fact war is the most evil, most destructive, most wasteful human endeavor. The war took one-fifth of the nation’s workforce from their homes and jobs, forced the rationing of basic foods and materials, and wasted billions of dollars on machines that were built and then destroyed. And we were lucky. Elsewhere around the world tens of millions of others were killed, wounded or uprooted, and entire national industries were decimated.

Those millions of people had creative and productive potential that was delayed or never realized. War is loss, always loss.

Creamer ignores that Keynesian economists predicted another slide into the Great Depression as a result of the end of war spending, yet the opposite happened. The economy boomed, and the millions of returning soldiers, sailors and marines soon had jobs. In just two years the massive war deficits were gone and the federal government was in budget surplus as a result of a huge cut in government spending.

He blames the tax cuts that George W. Bush signed into law for harming the economy and points to the Clinton administration, when millions of news jobs were created and a budget surplus resulted with marginal tax rates that were higher than under Bush.

Creamer neglects to point out that federal spending soared from $1.8 trillion when Bush took office to $3.4 trillion when he left office, an 83 percent increase in nominal dollars. The total increase in spending during the eight years of the Clinton administration was just 32 percent.

If we adjust for inflation, the average annual increase in real spending under Bush was 4.9 percent; under Clinton, 1.5 percent. This means the inflation-adjusted spending increases under Bush were more than three times greater than under Clinton, who enjoyed an economy that Creamer praises.

Tax cuts don’t cause deficits. They don’t cause economic declines. Spending that exceeds revenue causes deficits. Spending that grows the government causes economic declines because the private sector pays for government spending. The more the private sector must pay to support government, the less the private sector has to spend on itself.

Creamer laments the current economy and lauds the economy under President Clinton. Federal outlays at the end of the Clinton presidency totaled 18.2 percent of GDP, according to President Obama’s fiscal commission. Today federal spending tops 25 percent of GDP.

Yet Creamer blames tax cuts for economic problems and says the government needs to spend even more.

Steve Stanek is a research fellow at The Heartland Institute and a former managing editor of two Heartland publications, "Budget & Tax News" and "Finance, Insurance & Real Estate News." Stanek's articles have appeared in numerous local, state and national publications since he began writing for Heartland in 2003, and he has been a frequent guest on local and national radio and television programs discussing government budget and regulatory issues.

I’ll bet he never spent a day in prison either…….while a poor man trying to feed his family is sent there for writing 2-3 bad checks. Gotta love the libercrats

Anonymous

there is nothing in this article that points out or proves the point — no data supporting the ridiculous claims therein — just talking points

Massive at home government spending continued after WWII on things like the interstate highway system and GI education and government sponsored home loans, etc. That was stimulus and education made a better work force

Mike

The interstate highway system did not begin until 11 years after the end of the war, AdmC. The GI bill and government-sponsored home loans cost just a tiny fraction of what the government spent building battleships, planes, trucks, rifles, etc. And how have those government-sponsored loans worked out? Have you heard of the Fannie and Freddie bailouts? The subprime mortgage meltdown, etc.? Those were made possible by the government-sponsored manipulation of the mortgage market.